Businesses are constantly searching for new ways to acquire new customers while also keeping costs down. With customers becoming savvier, and thus sceptical of traditional marketing tactics, this becomes an even bigger challenge. However, using a freemium acquisition model can reduce the cost required to acquire new customers by shifting the education burden from your sales and marketing teams to the customer. The freemium model creates a natural lead nurturing process that offers users the opportunity to discover your product and its capabilities on their own. After achieving success with your product, free tier users will eventually reach the limits of the free-level account and decide to invest in a premium account in order to gain access to the full set of features and value that your product provides. By limiting access or usage in your product, you create friction for free users, which encourages them to upgrade to your premium tier.
So, when B2B companies implement a freemium acquisition model, it involves a more convoluted system of limitations. Users need more incentive to upgrade because of the complexity and high price associated with the product. Zapier is a web application that allows users to connect different digital tools together through sequences of automated triggers called “Zaps.” To boost account creations and give tentative users just a small taste of what the product is capable of, Zapier uses a freemium model that leverages all of the different types of limitations that you can place on a freemium product. This is a great strategy because the single-step Zap is a perfect way to give users a taste of how powerful the product is, while still leaving them wanting more. They also have gated app integrations that are only available to premium users. So, if users want to build Zaps to connect with tools like PayPal, Magento, or Facebook ads platform, they will need to upgrade to one of the premium tiers. In addition to gating certain features in their product, Zapier also places limits on the usage that users are allotted. This is an excellent example of how complex and expensive freemium products can take a very targeted and comprehensive approach to boost revenue by encouraging free users to upgrade to premium.
The app also lets users save music, create and share playlists, and discover new music. In the case of Spotify, the free plan lets users stream most albums, playlists, or curated radio stations on shuffle play, but they are served ads in between songs and users can't skip to specific songs they like. Conversely, the Premium plan level affords users a much deeper set of features for a richer experience. But free users still see a lot of the value of the product through the limited features.

Still, things like the inability to switch to a specific song on a playlist when listening constantly remind users of what they are missing out on by not going premium. Users in the free tier are only allotted four song skips every hour. This restriction is eliminated after upgrading to premium, allowing users to skip as many songs as they wish. Coupling this limitation with the fact that free users can only listen to playlists on shuffle adds up to a powerful incentive for any picky music listeners out there. Finally, as mentioned earlier, free users are served ads in between songs. Free users get a taste for the value of the product through the limited features, but the limitations create enough friction that anyone looking to become more than just a casual user will likely upgrade to remove the limitations. Evernote is a notetaking and organizing app that allows users to jot down notes in different “notebooks” across different devices for notetaking and writing on-the-go. Evernote Basic's features are fairly limited for users who want anything beyond the basic functionalities of a virtual notebook. Evernote Basic users can only get customer support through self-serve online forums, and they do not have access to collaborative notebooks or the ability to work offline in Evernote, among many other paid features. Evernote Basic only allows users to sync notes across two devices, vs. Freemium vs. Just like freemium, free trials are designed to lower the cost of acquisition by letting the product and on-boarding do the work of converting leads into customers.
Freemium, on the other hand, creates a pressure-free environment for new users to explore your product without being forced to make a purchase decision before they're ready. Freemium also allows your solution to scale in parallel with your users' needs. This makes it easy for your product to become integrated into your users' normal workflow, making the limits that you've placed on your free-level plan more effective because it is much more painful to switch to something else. They start by giving users two GB of free storage, and as users see the value and start adding more and more files to their Dropbox account, it becomes their new norm for storing and sharing electronic files. When users finally reach the 2 GB storage limit, it's will have become very hard to switch to a new solution and move all of these files somewhere else, so the user ends up paying for more storage instead. One of the best ways to grow a product quickly with extraordinarily little cost is to leverage word of mouth from current users, and freemium makes this extremely easy. So, even if your free users are not directly bringing in revenue for your business, they could still be helping you grow by referring your product to others in their network.
If users can get all of the value that they need from your free plan, there is obviously no incentive for them to upgrade to a paid account. You just need to make sure that you're leaving enough of a value gap to create friction for free users in order to encourage more upgrades. Get the best of both worlds by offering new users a full-featured free trial while still offering a limited free-forever plan at the end. You can see in the example above, TuneIn Radio offers free users a free trial for their Premium tier so that customers can experience the full functionality of the app.

Offering a free trial lets new users explore the full functionality of your product with no limitations. That means it is absolutely essential that your free users are able to quickly and easily discover the value of your product right when they sign up. This can significantly increase the likelihood that free users will upgrade to a paid account. Remind users to upgrade at every turn.

One important thing to keep in mind is that your users are real people, which means you cannot expect them to pick up on subtle encouragement to upgrade their account. Instead, you should find every excuse to remind users that they are on a limited plan and that they have the option to upgrade to a paid account with fewer restrictions.
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